Why are oil prices high in the Eurozone?

Question

Perhaps I don't understand the logic or something but oil is purchased in dollars, which means that when the dollar falls in value it has automatic effect on the Euro which means that the euro becomes stronger, which in effect means that oil prices increase at a slower rates. However oil prices in europe have increased over 20% in the last year. So what the h**l is going on?

Answer 1

Oil prices *have* increased at slower rates in the Eurozone.  Oil prices are only three times their 2002 price in Euros, as opposed to five times their 2002 price in USD.

No one is arguing that the increase in prices is solely due to the exchange rate.  Just that the falling USD makes it more profitable to speculate in commodities valued in USD.

Answer 2

Oil prices in Europe also pay for most of their socialized health care expenses.  Also, there has been a big increase in world oil use due mostly to India and China.

Answer 3

The cost of oil has gone up so much from supply shortages and increased demand that even the weak dollar purchased in euros is not enough to offset the increase. The weak dollar is only one factor affecting oil prices right now. The others are:

Supply: Most oil exporting countries are at capacity, there is very little "easy' oil left to pump out of the ground to meet the increased demand. The new oil reserves being tapped are higher cost and lower quality.

Demand: China, India, and other third world economies are getting increased appetites for oil.

Futures: Poor stock market performance leads to increased commodity investment, which raises the price even further (which leads to more poor stock market performance etc...)

Answer 4

ssssshhh!! dont shed too much light on the truth of it all....don't you know this is supposed to be all Bush's fault...you're getting waaaaay to close to other reasons, here....better hush!!

Answer 5

We (european countries) lack our own petroleum reservoirs (north sea is soon going dry - recently hit peak oil) hence we rely on the lovely oil supplied mainly by the OPEC members... but they limit the supply because it means they are able to increase price.... ALSO we invaded Iraq which wasnt a good idea but hey what you gonna do about that....

Answer 6

When American global markets ridicule, spit on and use the Euro as toilet paper---if anything for a good belly laugh, THEN we weaken the Euro and BOOST the U.S. Dollar in DEFIANCE.

When we "little people" take a stand, with firey hearts all saying "We're tired of you all messing with the U.S."---and doing together what our politicians won't do to PROMOTE our U.S. Dollar ( like recalling those politicians--which is EASY to do), and tell the propogandist U.S. media to SHUT UP BADMOUTHING THE USA---THEN we'll see positive results.

We still hate Bush and his ineptness, we still work together to fight gas prices---but we BOOST our U.S. Dollar!!  THAT IS POSSIBLE AND THAT IS EXACTLY WHAT WE MUST DO.